Construction disputes are getting harder to resolve.
Projects have become more complex, with more parties, more data, and more at stake when something goes wrong.
Modern construction disputes often involve a web of stakeholders, each with their own role, risk, and perspective.
“You could have a case that…implicates 20, 30, 40 parties,” said Allison Snyder, a former partner at Porter Hedges, LLP, now a Houston-based construction arbitrator with the American Arbitration Association® (AAA®).
That level of involvement increases the volume of information and the time required to work through disputes. Large-scale cases routinely include massive document production and review.
“The size of the document databases are huge…you’re dealing with hundreds of thousands of documents,” Snyder said.
On top of that, technical disputes often require multiple layers of expert analysis across disciplines, from scheduling and delay to specific construction defects.
“Every party in the case is going to have an expert,” Snyder said.
All of this contributes to longer resolution timelines because understanding the full picture takes time.
Early Resolution Is Possible, but Timing Matters
Despite their complexity, many disputes are still resolved before reaching a final award. But early resolution isn’t just about acting quickly; it’s about acting at the right moment.
“Oftentimes, you'll get people who know it's going to behoove them to go try to settle early, but…it doesn't work. And oftentimes, it was because they just tried too early,” Snyder said. “There hadn't been enough discovery, they hadn't seen enough of the other side's case, they didn't have a good feel for what they thought they could prove, or what the other side could prove against them.”
As a result, disputes tend to evolve before they are resolved. Parties gather more information, refine their arguments, and reassess risk, then return to the table with a clearer understanding of the case.
“You see a lot of these cases mediating twice, sometimes even three times,” Snyder said.
Early resolution often breaks down when parties move before they have enough information to assess risk. In practice, disputes tend to resolve only after key facts are developed and positions are clearer, even if that means returning to the table more than once.
Relationships and Confidentiality Shape How Disputes Are Resolved
How a dispute is resolved isn’t just about the facts; it’s also shaped by the relationships between the parties and how the process is structured.
One of the defining characteristics of construction disputes is that the parties often aren’t strangers. “A lot of the contractors have worked with the same [subcontractors] for decades,” Snyder said. “These are long-standing relationships.”
That dynamic changes how disputes are approached. In many cases, the goal isn’t just to win, it’s to resolve the issue and preserve the ability to work together in the future.
Privacy is another key factor shaping how disputes are handled.
“There are oftentimes disputes where the parties don’t want to land at the courthouse…they want to be able to go resolve the dispute…semi-privately,” Snyder said.
Arbitration, in particular, generally allows parties to do exactly that: keep sensitive business information, including trade secrets, out of the public record while still reaching a binding outcome.
Where AI Fits in the Resolution Process — and Where It Doesn’t (Yet)
As disputes grow more complex, new tools are also beginning to shape how they are resolved.
While AI tools for document review, legal drafting, and case analysis are becoming standard, AI-led arbitration is a newer, evolving application.
The AAA recently launched the AI Arbitrator, which generates a proposed decision in smaller construction disputes between two parties, based on written submissions rather than live hearings. While the AI Arbitrator analyzes claims, reviews materials, and drafts a case summary, its output is not final. Parties have the opportunity to review and confirm its work, and a human arbitrator reviews, finalizes, and issues the award.
“[The human arbitrator] will review what the AI arbitrator did…to determine whether that award was proper,” Snyder said.
This human-in-the-loop model allows for greater efficiency while maintaining fairness, accuracy, and due process.
The AI Arbitrator, however, isn’t ready for larger, more complex construction cases. “I don’t see that coming in these large cases anytime soon,” Snyder said.
These disputes require more than analysis — they require the ability to apply industry knowledge and experience while weighing fairness, equity, and the contract terms at issue. For now, whether AI can fully take on that role remains to be determined, Snyder said.
What This Means for Companies Navigating Disputes
For companies operating in construction, disputes are less about avoiding them and more about how they’re managed when they arise.
Disputes have grown more complex, and resolution depends on more than just the merits of the case. Timing, information, and strategy shape when and how parties reach agreement, while relationships and privacy influence how disputes are approached. New tools like AI are beginning to play a role as well.
In practice, this means approaching disputes more deliberately — developing enough information before pushing for resolution, understanding the role relationships play, and recognizing where newer tools can and cannot add value.
See How Disputes Are Being Resolved Across Industries
This Wall Street Journal feature explores how companies are resolving conflicts faster, more efficiently, and outside the courtroom.